2024 (9) TMI 864 - AT - Income Tax

Revision u/s 263 - prejudice caused to the revenue or the order is erroneous - debatable issue - Difference between stamp duty value and document value as computed which was not disclosed as income in view of the provisions of section 43CA - there is variation in documentary value and stamp duty value which and the same is to be treated as income of the assessee in view of the provisions of section 56(2)(vii)(b)(ii) - HELD THAT - Pr.CIT, on perusal of assessment records may be of the opinion that there is difference in documentary transaction i.e., consideration recorded in sale deed and guideline value and value adopted by the stamp duty authorities that he would have to estimate income at figure higher than the one determined by the AO. That would not vest the by Pr.CIT with power to re-examine the accounts and re-determine the income at higher figure. It is because, the AO has exercised his quasi-judicial power vested in him, in accordance with law and arrived at a conclusion and such a conclusion cannot be termed as erroneous, insofar as prejudicial to the interests of the revenue, because the Pr.CIT does not feel satisfied with the conclusion. At the best, it can be said that in the opinion of the Pr.CIT, the order of the AO is prejudicial to the interests of the revenue, but that by itself, it does not give power to Pr. CIT for suo motu revision, because first requirement is order is erroneous is absent. In the present case also, the Pr.CIT has not recorded any finding, quo effect that there is any prejudice caused to the revenue or the order is erroneous i.e., reassessment order. In our view, any and every erroneous order cannot be subject matter of revision, because, second requirement also is to be fulfilled i.e., error in the order, which has not been pointed out by the Pr.CIT. As decided in Gabriel India Ltd. 1993 (4) TMI 55 - BOMBAY HIGH COURT there must be some franchise material on record to show that tax which was lawfully exigible has not been imposed or that by application of the relevant statue on an incorrect or incomplete interpretation a lesser tax than what was just has been imposed. Thus there must be material available on record called for by the Pr.CIT to satisfy himself prima-face, that two requisite conditions i.e., erroneous and prejudicial to the interest of the Revenue are present in the order of the AO. Issues under revision are on simplicitor valuation of stamp duty and simplicitor valuation done on the guideline value adopted by the stamp valuation authority, which is just an estimate and cannot be subject matter of revision u/s. 263.See Shri Shanmuga Sundaram Govindaraj Vs ACIT 2022 (7) TMI 1150 - ITAT CHENNAI Issues raised by the Pr.CIT in regard to difference between the stamp duty value and documentary value for purchase and sale of lands and acquiring of the properties during financial year 2013-14 relevant to the assessment year 2014-15 by the assessee is nothing but an estimate and this is highly debatable issue. Even, in the case of CIT Vs. Mrs.Padmavathy 2020 (10) TMI 425 - MADRAS HIGH COURT has considered an identical issue and therefore, held that revision is not possible merely because guideline value was higher than the sale consideration shown in the deed of conveyance and hence, same cannot be sole reason for holding that assessment is erroneous, insofar as prejudicial to the interests of the revenue. Hence, we quash the revision order on this facet also. Decided in favour of assessee.

Summary

Issues Involved:
1. Difference between stamp duty value and document value.
2. Variation in documentary value and stamp duty value for acquired properties.
3. Set off of short-term capital loss without documentary evidence.

Issue-wise Detailed Analysis:

1. Difference between Stamp Duty Value and Document Value:
The Principal Commissioner of Income Tax (Pr.CIT) issued a revision order under section 263 of the Income Tax Act, 1961, setting aside the reassessment order dated 26-03-2022. The Pr.CIT noted that the sale value of land was adopted per document value instead of stamp duty value, resulting in a difference of Rs. 83.70 lakhs, which was not disclosed as income under section 43CA of the Act. The assessee contended that the original assessment was completed after thorough verification and that the reassessment proceedings were carried out with the same set of facts. The Tribunal found that the Assessing Officer (AO) had already examined this issue during both the original and reassessment proceedings and had formed an opinion that no addition was warranted. It was held that the Pr.CIT cannot re-examine the same facts and arrive at a different conclusion merely because he disagrees with the AO's decision. The Tribunal quashed the revision order on this ground, citing the precedent from the Hon'ble Bombay High Court in CIT Vs. Gabriel India Ltd. (1993) 203 ITR 108.

2. Variation in Documentary Value and Stamp Duty Value for Acquired Properties:
The Pr.CIT also noted that the assessee acquired properties during the financial year 2013-14, with a variation in documentary value and stamp duty value amounting to Rs. 11,16,250/-, which was not treated as income under section 56(2)(vii)(b)(ii) of the Act. The Tribunal observed that the AO had already considered this issue during the reassessment proceedings and had accepted the returned income after examining the relevant details. The Tribunal reiterated that the Pr.CIT cannot revise the order simply because he believes a higher income should have been assessed, especially when the AO has already applied his quasi-judicial powers to reach a conclusion. The Tribunal further noted that the issue of valuation based on stamp duty is highly debatable and cannot be the sole reason for revision under section 263, referencing the Hon'ble Madras High Court's decision in CIT Vs. Smt. Padmavathi 120 taxmann.com 187.

3. Set Off of Short-term Capital Loss Without Documentary Evidence:
The Pr.CIT raised an issue regarding the set-off of short-term capital loss pertaining to the assessment year 2009-10 against the short-term capital gain for the assessment year 2014-15, for which no documentary evidence was available on record. The Tribunal found that the AO had issued a notice under section 143(2) during the reassessment proceedings, calling for details regarding the transactions, and the assessee had responded with the necessary information. The Tribunal held that the AO had conducted an enquiry and formed an opinion based on the available evidence, and thus, the Pr.CIT's revision on this ground was not justified. The Tribunal emphasized that the Pr.CIT must demonstrate that the AO's order is both erroneous and prejudicial to the interests of the revenue, which was not established in this case.

Conclusion:
The Tribunal concluded that the revision order passed by the Pr.CIT under section 263 was bad in law and quashed it. The appeal filed by the assessee was allowed, and the Tribunal reiterated that the issues raised by the Pr.CIT were either already examined by the AO or were highly debatable, and thus, not suitable for revision under section 263. The order was pronounced in the open court on 30th August 2024.